| #540 - January 21, 2008 |
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| #540 Updated: 1/21/08 8:55 a.m. SkyCaddie Maker's CFO Charged with Stealing $2M cfo.com | 1/21/08 | Stephen Taub The chief financial officer of the Mississippi company that makes the SkyCaddie global-positioning-system rangefinder for golfers was arrested for allegedly embezzling more than $2 million, according to the Madison County Herald. Mahalingam Shrinivas was arrested after an internal investigation uncovered "financial irregularities," according to the paper. It cited Walter Weems, an attorney representing SkyHawke Technologies LLC, as saying, "We turned those (findings) over to the local authorities." Shrinivas, who faces a maximum prison term of 15 years, couldn't be contacted for comment. A receptionist at the company, based in Ridgeland, Miss., told CFO.com that he was currently "encarcerated," and no phone listings were found for the executive. It is still unknown how long the finance executive engaged in the alleged scheme, according to the report. The paper said police recovered about $500,000 in suspicious items from a local hotel room where Shrinivas apparently was staying. However, the exact items were not identified. "We have plans to seize more items," a local detective told the paper. Shrinivas lived in Marina del Rey, Calif., according to the paper's account, and commuted from southern California to Mississippi, where he worked two weeks on and two weeks off. He had been with the company for about two years. SkyCaddies, which sell for up to $400 each, have been hot items for golfers in recent years, and are high on the list of Golf magazine's suggested gift items, for example. Banks can help your business prevent financial fraud wausaudailyherald.com | 1/20/08 | Alfred Nakhla Financial fraud is a significant threat to businesses these days. Not only are there potentially big payoffs for criminals, but in many cases there is little risk of being caught or punished. Today's technology has enabled many people to cheat the system by easily creating fake checks with today's high-tech scanners and copiers. Equipment used to make phony IDs can be bought online for only a few hundred dollars. Sometimes your own employees can be the perpetrators of fraud. Recent regulation changes place greater liability for the business in case of fraud. Nevertheless, studies show only one in three companies has a comprehensive fraud protection program in place. Fortunately, you can take steps to fight fraud, creating a program using technology and sound business management practices. In addition, your bank can be an excellent resource and partner as you implement changes. The first priority is hiring good employees and keeping a secure working environment. Establish, document and constantly update policies for all accounting functions. Limit access to computer equipment to what's needed for employees to do their jobs, and rotate employees around so that one person doesn't have unrestricted access to sensitive information. Observe and take action on any suspicious behavior during transactions. One of the most effective ways to prevent fraud is by using online banking. Besides making payments with ease, you can check your transactions daily in real time. Any suspicious activity can be reported right away, and the sooner reported the greater the possibility of having the funds returned. By transferring more funds electronically, you reduce the number of paper checks you issue, and thus reduce the number of individuals potentially seeing your account information. As another layer of security, consider having your financial institution install a block or filter on your accounts to prevent any unauthorized withdrawals. In many cases, setting up a separate account to handle all electronic transactions is appropriate. If you feel you must use paper checks, make sure that your stock of blank checks is kept under secure lock and controlled by someone other than the individual that issues the payments. Another vital step to preventing fraud is to use a Positive Pay service, through which businesses create and send the bank a list of all the checks written during a specified time period. This list is compared against all checks presented at the bank for payment. Questionable items are reported to the businesses that issued the checks, which then decide whether to pay. Using a remote deposit service can allow you to scan checks from your office and deposit them electronically. The threat of losing checks in transit to the bank or having them stolen is minimized. Finally, front-line bank employees are a guard against fraud through paper checks. They have been thoroughly trained to identify potential bad checks by examining bank transit numbers, raised ink, the perforation at the edge, and more. By using all the tools available to you and employing common sense, you can help keep your business safe from fraud. Man accused of bank embezzlement thehawkeye.com | 1/19/08 | JOHN MANGALONZO After being delayed twice, the case against a former Burlington bank officer who, after being presented with a complaint, readily admitted he embezzled over half a million dollars from two banks, will soon draw to a close after a judge set the matter for sentencing. At 10 a.m. Feb. 13, Michael Dean Miller, the 51-year-old former banker, will stand before a federal judge and finally know if he is going to prison or not. Miller, of Burlington, pleaded guilty to two counts of bank embezzlement and three counts of money laundering, all stemming from his time as a bank officer at the former Burlington Bank and Trust in Burlington and Two Rivers Bank and Trust in Polk County. The crimes, court records show, occurred from 2001 to 2006. During those times Miller, according to the complaint, misapplied $569,115 of the banks' money. Those funds, bank officials say, did not include customers' money. Counting on his client's lack of a criminal record, Miller's Des Moines-based attorney, Guy Cook, will assert his request for leniency. "We will continue with our arguments to the court regarding the possibility of probation or home confinement as we believe that circumstances here warrant a departure from the normal sentence that would be imposed because of Mr. Miller's cooperation and forthrightness in coming forward and accepting responsibility," Cook said, shortly after getting the sentence scheduling Friday. Miller faces up to 30 years in a federal prison for the embezzlement charges and up to 10 years for the three counts of money laundering, which federal prosecutors are expected to seek. A representative from the U.S. Attorney's Office was not available for comment Friday. "Yes, I would expect they will ask for prison time as punishment and to deter others," Cook said. On Aug. 1, Miller signed a waiver of indictment and opted instead to plead guilty as charged, after an agreement was penned between him, his attorney and federal prosecutors, less than a month after the complaint was filed. Kent Gaudian, president of Burlington Bank and Trust -- now operating as Two Rivers -- said they discovered the "irregularities" December 2006 after a review was conducted on Miller's personal bank account. Federal prosecutors said Miller, on different occasions, deposited $42,500, money investigators deemed he acquired through "unlawful activity" from misapplying funds belonging to the bank. Per the plea agreement, Miller will have to pay restitution of more than $540,000 immediately after sentencing. CFO of title firm admits to fraud scheme startribune.com | 1/18/08 | DAN BROWNING The chief financial officer for a Twin Cities title and escrow company pleaded guilty on Friday in federal court to diverting nearly $135,000 from a secret escrow account for a down payment on her home in Buffalo. As part of her plea agreement, Christine Hein, 39, agreed to testify against the owner of Profile Title & Escrow Corp., Molly L. Heise, of Greenfield. Both women had been charged with scheming to defraud the company's underwriter, Chicago Title Insurance Co. The government says they defrauded Chicago Title, and possibly some lenders, by depositing more than $370 million in loan proceeds in a secret bank account from June 2002 through December 2003. Heise allegedly spent more than $2 million from the account on houses, landscaping, a Hummer, a motorhome, a Wisconsin cabin and a boat. Hein admitted in court Friday that she wrote a check for $134,965.85 from the account for a down payment on her home. Her plea agreement anticipates a sentence of 21 to 27 months in prison, two to three years of supervised release, and restitution. If she aids the case against Heise, Assistant U.S. Attorney David MacLaughlin may move for a reduced sentence. Profile Title was primarily a loan closing operation. Hein told U.S. District Judge John Tunheim that the company had accounting problems in 2002. Chicago Title audited the books and required Profile to use an escrow account at Eagle Valley Bank, which could be monitored. She said Profile Title secretly opened an account at Eastbank, through which it routed millions of dollars. The indictment says that after Chicago Title revoked Profile Title's underwriting agreement, Heise and Hein issued counterfeit Chicago Title closing letters to their clients' lenders. They also allegedly failed to pay off some of the property liens despite saying that they had done so. Hein pleaded guilty to one count of spending money derived from an unlawful activity. The fraud scheme charge and one count of promotion money laundering will be dismissed as part of her plea agreement. Man sentenced for fraud baltimoresun.com | 1/19/08 | Matthew Dolan A federal judge sentenced a Prince George's County man yesterday to serve two years in prison for filing more than $300,000 worth of false overtime and expense claims with the U.S. Army Corps of Engineers. U.S. District Judge Andre M. Davis sentenced Myron Price, 45, of Accokeek to two years in prison followed by three years of supervised release for making false claims for overtime and travel expenses in connection with his work as a physical scientist for the Corps of Engineers. The judge also ordered that Price pay restitution of $379,436.55. Price's primary duty station with the Corps of Engineers was in Baltimore. According to documents filed with his guilty plea, Price admitted that for the six-year period from 1998 to 2004, he falsified travel vouchers and overtime claims on his time and attendance reports. ________________________ |